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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549





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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934For the Year Ended December 31, 2001         Commission File Number 1-5823

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CNA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 36-6169860
(I.R.S. Employer
Identification No.)
|                                                                       
|CNA Plaza
Chicago, Illinois
(Address of principal executive offices)    |  | 60685
(Zip Code)                               

(312) 822-5000
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

|                    |  |                                          |  |  |  | 
|------------------- |  | ---------------------------------------- |  |  |  | 
|Title of each class |  | Name
of each exchange onwhich registered
|                    |  |                                         
|Common Stock        |  | New York Stock Exchange                 
|with a par value    |  | Chicago Stock Exchange                  
|of $2.50 per share  |  | Pacific Exchange                        

|                                                                
|----------------------------------------------------------------
|                                                                
|Securities registered
pursuant to Section 12(g) of the Act:
None
|                                                                

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes CHECK MARK No....

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation SK is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10K or any amendment to
this Form 10K. CHECK MARK IN BOX

As of March 1, 2002, 223,596,861 shares of common stock were outstanding
and the aggregate market value of the common stock of CNA Financial Corporation
held by nonaffiliates was approximately $735 million.

DOCUMENTS INCORPORATED
BY REFERENCE:

Portions of the CNA Financial Corporation 2001 Annual Report to
Shareholders are incorporated by reference into Parts I and II of this Report.

Portions of the CNA Financial Corporation Proxy Statement prepared for the
2002 annual meeting of shareholders, pursuant to Regulation 14A, are
incorporated by reference into Part III of this Report.



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TABLE OF CONTENTS



|                                                                                              |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I                                                                                       
|ITEM 1. BUSINESS                                                                             
|ITEM 2. PROPERTIES                                                                           
|ITEM 3. LEGAL PROCEEDINGS                                                                    
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART II                                                                                      
|ITEM 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS             
|ITEM 6. SELECTED FINANCIAL DATA                                                              
|ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART III                                                                                     
|ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|ITEM 11. EXECUTIVE COMPENSATION                                                              
|ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART IV                                                                                      
|ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM 10-K                  
|Employment Agreement for Stephen W. Lilienthal                                               
|Computation of Ratio Earnings to Fixed Charges                                               
|2001 Annual Report                                                                           
|Primary Subsidiaries of CNAF                                                                 
|Independent Auditors' Consent                                                                



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##### Table of Contents



|       |     |         |                                                                                       |        |  |      |  |  | 
|------ | --- | ------- | ------------------------------------------------------------------------------------- | ------ |  | ---- |  |  | 
|Item   |     |         |                                                                                       |        |  | Page | 
|Number |     | PART I  |                                                                                       | Number | 
|       |     |         |                                                                                       |        | 
|       | 1.  |         | Business                                                                              |        |  | 3    | 
|      
|       | 2.  |         | Properties                                                                            |        |  | 11   | 
|      
|       | 3.  |         | Legal Proceedings                                                                     |        |  | 11   | 
|      
|       | 4.  |         | Submission of Matters to a Vote of Security Holders                                   |        |  | 11   | 
|      
|       |     | PART II |                                                                                       |        |  |     
|       | 5.  |         | Market for the Registrant's Common Stock and Related Stockholder Matters              |        |  | 12   | 
|      
|       | 6.  |         | Selected Financial Data                                                               |        |  | 12   | 
|      
|       | 7.  |         | Management's
Discussion and Analysis of Financial Condition and Results of Operations |        |  | 12   | 
|      
|       | 7A. |         | Quantitative and Qualitative Disclosures about Market Risk                            |        |  | 12   | 
|      
|       | 8.  |         | Financial Statements and Supplementary Data                                           |        |  | 12   | 
|      
|       | 9.  |         | Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure  |        |  | 12   | 
|      
|       |     |         | PART III                                                                              |        |  |      | 
|       | 10. |         | Directors and Executive Officers of the Registrant                                    |        |  | 13   | 
|      
|       | 11. |         | Executive Compensation                                                                |        |  | 14   | 
|      
|       | 12. |         | Security Ownership of Certain Beneficial Owners and Management                        |        |  | 14   | 
|      
|       | 13. |         | Certain Relationships and Related Transactions                                        |        |  | 14   | 
|      
|       |     |         | PART IV                                                                               |        |  |      | 
|       | 14. |         | Financial
Statements, Schedules, Exhibits and Reports on Form 10-K                    |        |  | 15   | 





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PART I




ITEM 1. BUSINESS

CNA Financial Corporation (CNAF or the Company) was incorporated in 1967 and is
an insurance holding company whose primary subsidiaries consist of
property-casualty and life insurance companies. Collectively CNAF and its
subsidiaries are referred to as CNA. CNAs property-casualty insurance
operations are conducted by Continental Casualty Company (CCC), incorporated in
1897, and its affiliates, and The Continental Insurance Company (CIC),
organized in 1853, and its affiliates. Life insurance operations are conducted
by Continental Assurance Company (CAC), incorporated in 1911, and its
affiliates and CNA Group Life Assurance Company (CNAGLAC), incorporated in
2000. CIC became an affiliate of the Company in 1995 as a result of the
acquisition of The Continental Corporation (Continental). The principal
business of Continental is the ownership of a group of property-casualty
insurance companies.

CNA serves a wide variety of customers, including small, medium and large
businesses; insurance companies; associations; professionals; and groups and
individuals with a broad range of insurance and risk management products and
services.

Insurance products include property and casualty coverages; life, accident and
health insurance; retirement products and annuities; and property-casualty and
group reinsurance. CNA services include risk management, information services,
healthcare claims management, claims administration and employee
leasing/payroll processing. CNA products and services are marketed through
independent agents, brokers, managing general agents and direct sales. CNAs
principal market is the United States with a continued focus on expanding
globally in limited markets to serve those with growing worldwide interests, as
well as adding value in international market niches.

CNA conducts its operations through five operating segments: Standard Lines,
Specialty Lines, CNA Re, Group Operations and Life Operations. These segments
are managed separately because of differences in their product lines. In
addition to these five operating segments, certain other activities are managed
and reported in the Corporate and Other segment. Discussions of each segment
including the products offered, the customers served and the distribution
channels used are set forth in the Managements Discussion and Analysis section
of the 2001 Annual Report to Shareholders, incorporated by reference in Item 7,
herein.

Competition

CNA competes with a large number of stock and mutual insurance and reinsurance
companies and other entities for both producers and customers, and must
continuously allocate resources to refine and improve its insurance and
reinsurance products and services.

There are approximately 2,450 individual companies that sell property-casualty
insurance in the United States. CNAFs consolidated property-casualty
subsidiaries ranked as the ninth largest property-casualty insurance organization
in the United States based upon 2000 statutory net written premiums. CNA Re
ranked as the 14th largest property-casualty reinsurance organization in the
United States, based upon 2000 statutory net written premiums, which are
significantly higher than net written premiums in 2001.

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There are approximately 1,010 companies selling life insurance in the United
States. CNAs consolidated life insurance companies are ranked as the 40th
largest life-health insurance organization in the United States, based on 2000
statutory net written premiums.

Due to the industry losses from the September 11, 2001 World Trade Center and
related events (WTC event), the commercial property-casualty markets have
experienced favorable rate increases. Since the WTC event, market conditions
are allowing direct commercial insurers to realize significant rate increases.

The reinsurance markets are experiencing rate increases, however, not to the
extent experienced by the direct commercial markets.

Dividends by Insurance Subsidiaries

The payment of dividends to CNAF by its insurance subsidiaries without prior
approval of the affiliates domiciliary state insurance commissioners is
limited by formula. This formula varies by state. The formula used by the
majority of the states provides that the greater of 10% of prior year statutory
surplus or prior year statutory net income, less the aggregate of all dividends
paid during the 12 months prior to date of payment, is available to be paid as
a dividend to the parent company.

Dividends from the CCC Pool are subject to the insurance holding company laws
of the State of Illinois, the domiciliary state of CCC. Under these laws,
ordinary dividends, or dividends that do not require prior approval of the
Illinois Department of Insurance (the Department), may be paid only from earned
surplus, which is calculated by removing unrealized gains (which under
statutory accounting includes cumulative earnings of CCCs subsidiaries) from
unassigned surplus. As of December 31, 2001, CCC is in a negative earned
surplus position. In February  2002, the Department approved an
extraordinary dividend in the amount of $117 million to be used to fund CNAFs
2002 debt service requirements. Until CCC is in a positive earned surplus
position, all dividends require prior approval from the
Department.

In addition, by agreement with the New Hampshire Insurance Department, as well
as certain other state insurance departments, dividend payments for the
CIC Pool are restricted to internal and external debt
service requirements through September 2003 up to a maximum of $85 million
annually, without the prior approval of the New Hampshire Insurance Department.

Regulation

The insurance industry is subject to comprehensive and detailed regulation and
supervision throughout the United States. Each state has established
supervisory agencies with broad administrative powers relative to licensing
insurers and agents, approving policy forms, establishing reserve requirements,
fixing minimum interest rates for accumulation of surrender values and maximum
interest rates of policy loans, prescribing the form and content of statutory
financial reports and regulating solvency and the type and amount of
investments permitted. Such regulatory powers also extend to premium rate
regulations, which require that rates not be excessive, inadequate or unfairly
discriminatory. In addition to regulation of dividends by insurance
subsidiaries discussed above, intercompany transfers of assets may be subject
to prior notice or approval by the state insurance regulators, depending on the
size of such transfers and payments in relation to the financial position of
the insurance affiliates making the transfer or payments.

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Insurers are also required by the states to provide coverage to insureds who
would not otherwise be considered eligible by the insurers. Each state
dictates the types of insurance and the level of coverage that must be provided
to such involuntary risks. CNAs share of these involuntary risks is mandatory
and generally a function of its respective share of the voluntary market by
line of insurance in each state.

Insurance companies are subject to state guaranty fund and other
insurance-related assessments. Guaranty fund and other insurance-related
assessments are levied by the state departments of insurance to cover claims of
insolvent insurers.

Reform of the U.S. tort liability system is another issue facing the insurance
industry. Over the last decade, many states have passed some type of reform,
but more recently, a number of state courts have modified or overturned these
reforms. Additionally, new causes of action and theories of damages continue
to be proposed in state court actions or by legislatures. Continued
unpredictability in the law means that insurance underwriting and rating is
expected to be difficult in commercial lines, professional liability and some
specialty coverages.

Although the federal government and its regulatory agencies do not directly
regulate the business of insurance, federal legislative and regulatory
initiatives can impact the insurance business in a variety of ways. These
initiatives and legislation include tort reform proposals; proposals to
overhaul the Superfund hazardous waste removal and liability statutes and
various tax proposals affecting insurance companies. In 1999 Congress passed
the Financial Services Modernization or Gramm-Leach-Bliley Act (GLB Act),
which repealed portions of the Glass-Steagall Act and enabled closer
relationships between banks and insurers. Although functional regulation was
preserved by the GLB Act for state oversight of insurance, additional financial
services modernization legislation could include provisions for an alternate
federal system of regulation for insurance companies.

CNAFs domestic insurance subsidiaries are subject to risk-based capital
requirements. Risk-based capital is a method developed by the National
Association of Insurance Commissioners (NAIC) to determine the minimum amount
of statutory capital appropriate for an insurance company to support its
overall business operations in consideration of its size and risk profile. The
formula for determining the amount of risk-based capital specifies various
factors, weighted based on the perceived degree of risk, that are applied to
certain financial balances and financial activity. The adequacy of a companys
actual capital is evaluated by a comparison to the risk-based capital results,
as determined by the formula. Companies below minimum risk-based capital
requirements are classified within certain levels, each of which requires
specified corrective action. As of December 31, 2001 and 2000, all of CNAFs
domestic insurance subsidiaries exceeded the minimum risk-based capital
requirements.

CNA Res principal United Kingdom operations are contained in CNA Reinsurance
Company Ltd. The statutory surplus of CNA Reinsurance Company Ltd. is below
the required regulatory minimum surplus level at December 31, 2001.

Subsidiaries with insurance operations outside the United States are also
subject to regulation in the countries in which they operate.

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Reinsurance

Information on CNAs reinsurance activities is set forth in Note H of the
Consolidated Financial Statements of the 2001 Annual Report to Shareholders,
incorporated by reference in Item 8, herein.

Employee Relations

As of December 31, 2001, CNA had approximately 17,274 full-time equivalent
(FTE) employees and has experienced satisfactory labor relations. CNA has never
had work stoppages due to labor disputes. During 2001, CNA announced two
restructuring plans, which include FTE reductions of approximately 2,100
positions.

CNA has comprehensive benefit plans for substantially all of its employees,
including retirement plans, savings plans, disability programs, group life
programs and group healthcare programs. See Note J of the Consolidated
Financial Statements of the 2001 Annual Report to Shareholders for further
discussion, incorporated by reference in Item 8, herein.

Government Contracts

CNAs premium revenue includes premiums under group life and health insurance
contracts involving U.S. government employees and their dependents. Such
premiums were approximately $2.2 billion, $2.1 billion and $2.1 billion in
2001, 2000 and 1999.

Business Segments

Information on CNAs business segments is set forth in Note N of the
Consolidated Financial Statements of the 2001 Annual Report to Shareholders,
incorporated by reference in Item 8, herein.

Additional information on CNAs business segments is set forth in the
Managements Discussion and Analysis section of the 2001 Annual Report to
Shareholders, incorporated by reference in Item 7, herein.

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Supplementary Insurance Data

The following table sets forth supplementary insurance data:

|                                                  |                                                                      |      |         |         |      |   |         |         |   |   |         |         |  
|------------------------------------------------- | -------------------------------------------------------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|Years ended December 31                           |                                                                      | 2001 |         |         | 2000 |   |         | 1999    |  
|(In millions, except ratio information)           |                                                                      |      |         |         |      |   |         |         |  
|Trade Ratios  GAAP basis (a)                     |                                                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                  | Loss ratio                                                           |      |         | 125.2   | %    |   |         | 81.1    | % |   |         | 87.1    | %
|                                                  | Expense ratio                                                        |      |         | 36.7    |      |   |         | 30.4    |   |   |         | 32.4    |  
|                                                  | Combined ratio (before policyholder dividends)                       |      |         | 161.9   |      |   |         | 111.5   |   |   |         | 119.5   |  
|                                                  | Policyholder dividend ratio                                          |      |         | 1.5     |      |   |         | 0.9     |   |   |         | 0.3     |  
|                                                 
|Trade Ratios  Statutory basis (a)                |                                                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                  | Loss ratio                                                           |      |         | 126.3   | %    |   |         | 80.4    | % |   |         | 87.3    | %
|                                                  | Expense ratio                                                        |      |         | 32.3    |      |   |         | 33.3    |   |   |         | 33.5    |  
|                                                  | Combined ratio (before policyholder dividends)                       |      |         | 158.6   |      |   |         | 113.7   |   |   |         | 120.8   |  
|                                                  | Policyholder dividend ratio                                          |      |         | 1.7     |      |   |         | 1.2     |   |   |         | 0.3     |  
|                                                 
|Individual Life and Group Life Insurance In-force |                                                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                  | Individual life (b)                                                  |      | $       | 426,822 |      |   | $       | 462,799 |   |   | $       | 394,743 |  
|                                                  | Group life                                                           |      |         | 70,910  |      |   |         | 71,982  |   |   |         | 75,247  |  
|                                                  |                                                                      |      |         |         |      |   |         |         |  
|                                                 
|Total                                             |                                                                      | $    | 497,732 |         |      | $ | 534,781 |         |   | $ | 469,990 |        
|                                                  |                                                                      |      |         |         |      |   |         |         |  
|                                                 
|Other Data  Statutory basis (c)                  |                                                                      |      |         |         |      |   |         |         |   |   |         |        
|                                                  | Property-casualty companies capital and surplus(d)                  |      | $       | 6,225   |      |   | $       | 8,373   |   |   | $       | 8,679   |  
|                                                  | Life companies capital and surplus                                  |      |         | 1,752   |      |   |         | 1,274   |   |   |         | 1,222   |  
|                                                  | Property-casualty companies written premiums to surplus ratio       |      |         | 1.3     |      |   |         | 1.1     |   |   |         | 1.0     |  
|                                                  | Life companies capital and surplus-percent to total liabilities     |      |         | 25.3    | %    |   |         | 24.5    | % |   |         | 21.9    | %
|                                                  | Participating policyholders-percent of gross life insurance in-force |      |         | 0.4     | %    |   |         | 0.4     | % |   |         | 0.5     | %

(a)  Trade ratios reflect the results of CNAs property-casualty insurance
subsidiaries. Trade ratios are industry measures of property-casualty
underwriting results. The loss ratio is the percentage of net incurred claim
and claim adjustment expenses to net earned premiums. The primary difference
in this ratio between statutory accounting principles (SAP) and accounting
principles generally accepted in the United States of America (GAAP) is related
primarily to the treatment of active life reserves (ALR) related to long-term
care insurance products written in property-casualty insurance subsidiaries.
For GAAP, ALR are classified as loss reserves whereas for SAP, ALR are
classified as unearned premium reserves. The expense ratio, using amounts
determined in accordance with GAAP, is the percentage of underwriting and
acquisition expenses, including the amortization of deferred acquisition costs,
to net earned premiums. The expense ratio, using amounts determined in
accordance with SAP, is the percentage of acquisition costs and underwriting
expenses (with no deferral of acquisition costs) to net written premiums. The
combined ratio (before policyholder dividends) is the sum of the loss and
expense ratios. The policyholder dividend ratio, using amounts determined in
accordance with GAAP, is the ratio of dividends incurred to net earned
premiums. The policyholder dividend ratio, using amounts determined in
accordance with SAP, is the ratio of dividends paid to net earned premiums.

(b)  Lapse ratios for individual life insurance, as measured by surrenders and
withdrawals as a percentage of average ordinary life insurance in-force, were
8.7%, 12.7% and 10.9% in 2001, 2000 and 1999.

(c ) Other data is determined in accordance with SAP. Life statutory capital
and surplus as a percent of total liabilities is determined after excluding
Separate Account liabilities and reclassifying the statutorily required Asset
Valuation Reserve to surplus.

(d)  Surplus includes the property-casualty companies equity ownership of the
life insurance subsidiaries.

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The following table displays the distribution of
gross written premiums for CNAs operations:

|                                                        |  |      |       |   |      |                  |       |      |  |  |       |  
|------------------------------------------------------- |  | ---- | ----- | - | ---- | ---------------- | ----- | ---- |  |  | ----- | -
|Gross Written Premiums                                  |  |      |       |   |      | Percent of Total |      
|Years ended December 31                                 |  | 2001 |       |   | 2000 |                  |       | 1999 | 
|                                                        |  |      |       |   |      |                  |       |      | 
|Illinois                                                |  |      | 8.3   | % |      |                  | 9.2   | %    |  |  | 8.6   | %
|New York                                                |  |      | 7.9   |   |      |                  | 7.3   |      |  |  | 7.4   |  
|California                                              |  |      | 6.8   |   |      |                  | 6.0   |      |  |  | 7.1   |  
|Florida                                                 |  |      | 6.2   |   |      |                  | 4.8   |      |  |  | 4.6   |  
|Texas                                                   |  |      | 5.8   |   |      |                  | 4.7   |      |  |  | 5.4   |  
|New Jersey                                              |  |      | 4.4   |   |      |                  | 3.4   |      |  |  | 3.5   |  
|Pennsylvania                                            |  |      | 4.3   |   |      |                  | 3.8   |      |  |  | 4.1   |  
|United Kingdom                                          |  |      | 3.3   |   |      |                  | 5.3   |      |  |  | 5.8   |  
|Maryland                                                |  |      | 2.4   |   |      |                  | 5.6   |      |  |  | 4.5   |  
|All other states, countries or political subdivisions * |  |      | 50.6  |   |      |                  | 49.9  |      |  |  | 49.0  |  
|                                                        |  |      |       |   |      |                  |       |      | 
|Total                                                   |  |      | 100.0 | % |      |                  | 100.0 | %    |  |  | 100.0 | %
|                                                        |  |      |       |   |      |                  |       |      | 

* No other individual state, country or political subdivision accounts for more than 3.0% of gross written premiums.

Approximately 4.8%, 8.2%, and 7.6% of CNAs gross written premiums were derived
from outside of the United States for the years ended December 31, 2001, 2000
and 1999. Premiums from any individual foreign country excluding the United
Kingdom, which is stated in the table above, were not significant.

Property-Casualty Claim and Claim Adjustment Expenses

The following loss reserve development table illustrates the change over time
of reserves established for property-casualty claim and claim adjustment
expenses at the end of the preceding ten calendar years for CNAs
property-casualty operations. The first section shows the reserves as
originally reported at the end of the stated year. The second section, reading
down, shows the cumulative amounts paid as of the end of successive years with
respect to the originally reported reserve liability. The third section,
reading down, shows re-estimates of the originally recorded reserves as of the
end of each successive year, which is the result of the Companys
property-casualty insurance subsidiaries expanded awareness of additional
facts and circumstances that pertain to the unsettled claims. The last section
compares the latest re-estimated reserves to the reserves originally
established, and indicates whether the original reserves were adequate or
inadequate to cover the estimated costs of unsettled claims.

The loss reserve development table for property-casualty companies is
cumulative and, therefore, ending balances should not be added since the amount
at the end of each calendar year includes activity for both the current and
prior years.

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Schedule of Property-Casualty Loss Reserve Development

|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |        | 
|----------------------------------------------------------------------- | --------------------------------- | ------- | ------ | ------ | ------- | - | ------ | ------- | - | - | ------- | ------ | - | ------- | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | - | ------- | ------ | ------ | ---- | - | ------ | ------- | - | - | ------ | ------ | - | - | ------ | ------ | - | - | ------ | ------ | 
|Calendar Year Ended                                                     |                                   | 1991(a) |        |        | 1992(a) |   |        | 1993(a) |   |   | 1994(a) |        |   | 1995(b) |        |        | 1996 |   |        | 1997   |   |   | 1998   |        |   | 1999(c) |        |        | 2000 |   |        | 2001(d) |  
|(In millions)                                                           |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|Originally reported gross
reserves for unpaid
claims and claim
expenses |                                   |         |        |        |         |   |        |         |   | $ | 20,812  |        |   | $       | 21,639 |        |      | $ | 31,044 |        |   | $ | 29,357 |        |   | $       | 28,533 |        |      | $ | 28,317 |         |   | $ | 26,631 |        |   | $ | 26,408 |        |   | $ | 29,551 |       
|Originally reported ceded
recoverable                                   |                                   |         |        |        |         |   |        |         |   |   | 2,491   |        |   |         | 2,705  |        |      |   | 6,089  |        |   |   | 5,660  |        |   |         | 5,326  |        |      |   | 5,424  |         |   |   | 6,273  |        |   |   | 7,568  |        |   |   | 11,798 |       
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |       
|Originally reported net
reserves for unpaid claim
and claim expenses    |                                   | $       | 14,415 |        |         | $ | 17,167 |         |   | $ | 18,321  |        |   | $       | 18,934 |        |      | $ | 24,955 |        |   | $ | 23,697 |        |   | $       | 23,207 |        |      | $ | 22,893 |         |   | $ | 20,358 |        |   | $ | 18,840 |        |   | $ | 17,753 |       
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|Cumulative net paid as of:                                              |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |       
|                                                                        | One year later                    |         | $      | 3,411  |         |   | $      | 3,706   |   |   | $       | 3,629  |   |         | $      | 3,656  |      |   | $      | 6,510  |   |   | $      | 5,851  |   |         | $      | 5,954  |      |   | $      | 7,321   |   |   | $      | 6,546  |   |   | $      | 7,686  |   |   | $      |       | 
|                                                                        | Two years later                   |         |        | 6,024  |         |   |        | 6,354   |   |   |         | 6,143  |   |         |        | 7,087  |      |   |        | 10,485 |   |   |        | 9,796  |   |         |        | 11,394 |      |   |        | 12,241  |   |   |        | 11,935 |   |   |        |       |   |   |        |       | 
|                                                                        | Three years later                 |         |        | 7,946  |         |   |        | 8,121   |   |   |         | 8,764  |   |         |        | 9,195  |      |   |        | 13,363 |   |   |        | 13,602 |   |         |        | 14,423 |      |   |        | 16,020  |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Four years later                  |         |        | 9,218  |         |   |        | 10,241  |   |   |         | 10,318 |   |         |        | 10,624 |      |   |        | 16,271 |   |   |        | 15,793 |   |         |        | 17,042 |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Five years later                  |         |        | 10,950 |         |   |        | 11,461  |   |   |         | 11,378 |   |         |        | 12,577 |      |   |        | 17,947 |   |   |        | 17,736 |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Six years later                   |         |        | 11,951 |         |   |        | 12,308  |   |   |         | 13,100 |   |         |        | 13,472 |      |   |        | 19,465 |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Seven years later                 |         |        | 12,639 |         |   |        | 13,974  |   |   |         | 13,848 |   |         |        | 14,394 |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Eight years later                 |         |        | 14,271 |         |   |        | 14,640  |   |   |         | 14,615 |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Nine years later                  |         |        | 14,873 |         |   |        | 15,319  |   |   |         |       |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Ten years later                   |         |        | 15,476 |         |   |        |        |   |   |         |       |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|Net reserves re-estimated
as of:                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |       
|                                                                        | End of initial year               |         | $      | 14,415 |         |   | $      | 17,167  |   |   | $       | 18,321 |   |         | $      | 18,934 |      |   | $      | 24,955 |   |   | $      | 23,697 |   |         | $      | 23,207 |      |   | $      | 22,893  |   |   | $      | 20,358 |   |   | $      | 18,840 |   |   | $      | 17,753 | 
|                                                                        | One year later                    |         |        | 16,032 |         |   |        | 17,757  |   |   |         | 18,250 |   |         |        | 18,922 |      |   |        | 24,864 |   |   |        | 23,441 |   |         |        | 23,470 |      |   |        | 23,920  |   |   |        | 20,785 |   |   |        | 21,306 |   |   |        |       | 
|                                                                        | Two years later                   |         |        | 16,810 |         |   |        | 17,728  |   |   |         | 18,125 |   |         |        | 18,500 |      |   |        | 24,294 |   |   |        | 23,102 |   |         |        | 23,717 |      |   |        | 23,774  |   |   |        | 22,903 |   |   |        |       |   |   |        |       | 
|                                                                        | Three years later                 |         |        | 16,944 |         |   |        | 17,823  |   |   |         | 17,868 |   |         |        | 18,088 |      |   |        | 23,814 |   |   |        | 23,270 |   |         |        | 23,414 |      |   |        | 25,724  |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Four years later                  |         |        | 17,376 |         |   |        | 17,765  |   |   |         | 17,511 |   |         |        | 17,354 |      |   |        | 24,092 |   |   |        | 22,977 |   |         |        | 24,751 |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Five years later                  |         |        | 17,329 |         |   |        | 17,560  |   |   |         | 17,082 |   |         |        | 17,506 |      |   |        | 23,854 |   |   |        | 24,105 |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Six years later                   |         |        | 17,293 |         |   |        | 17,285  |   |   |         | 17,176 |   |         |        | 17,248 |      |   |        | 24,883 |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Seven years later                 |         |        | 17,069 |         |   |        | 17,398  |   |   |         | 17,017 |   |         |        | 17,751 |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Eight years later                 |         |        | 17,189 |         |   |        | 17,354  |   |   |         | 17,500 |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Nine years later                  |         |        | 17,174 |         |   |        | 17,834  |   |   |         |       |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        | Ten years later                   |         |        | 17,679 |         |   |        |        |   |   |         |       |   |         |        |       |      |   |        |       |   |   |        |       |   |         |        |       |      |   |        |        |   |   |        |       |   |   |        |       |   |   |        |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|Total net (deficiency)
redundancy                                       |                                   | $       | (3,264 | )      |         | $ | (667   | )       |   | $ | 821     |        |   | $       | 1,183  |        |      | $ | 72     |        |   | $ | (408   | )      |   | $       | (1,544 | )      |      | $ | (2,831 | )       |   | $ | (2,545 | )      |   | $ | (2,466 | )      |   | $ |       |       
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|Reconciliation to gross
re-estimated reserves:                          |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |       
|                                                                        | Net reserves
re-estimated         |         | $      | 17,679 |         |   | $      | 17,834  |   |   | $       | 17,500 |   |         | $      | 17,751 |      |   | $      | 24,883 |   |   | $      | 24,105 |   |         | $      | 24,751 |      |   | $      | 25,724  |   |   | $      | 22,903 |   |   | $      | 21,306 |   |   | $      |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |        | 
|                                                                        | Re-estimated ceded
recoverable    |         |        |        |         |   |        |         |   |   |         | 1,888  |   |         |        | 2,201  |      |   |        | 6,191  |   |   |        | 5,434  |   |         |        | 4,805  |      |   |        | 4,925   |   |   |        | 6,810  |   |   |        | 8,185  |   |   |        |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |       
|                                                                        | Total gross
re-estimated reserves |         |        |        |         |   |        |         |   |   | $       | 19,388 |   |         | $      | 19,952 |      |   | $      | 31,074 |   |   | $      | 29,539 |   |         | $      | 29,556 |      |   | $      | 30,649  |   |   | $      | 29,713 |   |   | $      | 29,491 |   |   | $      |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |       
|Net (deficiency)
redundancy related to:                                 |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |   |   |        |        |   |   |        |        |   |   |        |       
|                                                                        | Asbestos claims                   |         | $      | (3,754 | )       |   | $      | (2,068  | ) |   | $       | (1,469 | ) |         | $      | (1,435 | )    |   | $      | (1,662 | ) |   | $      | (1,763 | ) |         | $      | (1,660 | )    |   | $      | (1,416  | ) |   | $      | (837   | ) |   | $      | (772   | ) |   | $      |       | 
|                                                                        | Environmental claims              |         |        | (1,272 | )       |   |        | (1,230  | ) |   |         | (787   | ) |         |        | (619   | )    |   |        | (656   | ) |   |        | (600   | ) |         |        | (617   | )    |   |        | (395    | ) |   |        | (487   | ) |   |        | (473   | ) |   |        |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|                                                                        | Total asbestos and
environmental  |         |        | (5,026 | )       |   |        | (3,298  | ) |   |         | (2,256 | ) |         |        | (2,054 | )    |   |        | (2,318 | ) |   |        | (2,363 | ) |         |        | (2,277 | )    |   |        | (1,811  | ) |   |        | (1,324 | ) |   |        | (1,245 | ) |   |        |       | 
|                                                                        | Other claims                      |         |        | 1,762  |         |   |        | 2,631   |   |   |         | 3,077  |   |         |        | 3,237  |      |   |        | 2,390  |   |   |        | 1,955  |   |         |        | 733    |      |   |        | (1,020  | ) |   |        | (1,221 | ) |   |        | (1,221 | ) |   |        |       | 
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  
|Total net (deficiency)
redundancy                                       |                                   | $       | (3,264 | )      |         | $ | (667   | )       |   | $ | 821     |        |   | $       | 1,183  |        |      | $ | 72     |        |   | $ | (408   | )      |   | $       | (1,544 | )      |      | $ | (2,831 | )       |   | $ | (2,545 | )      |   | $ | (2,466 | )      |   | $ |       |       
|                                                                        |                                   |         |        |        |         |   |        |         |   |   |         |        |   |         |        |        |      |   |        |        |   |   |        |        |   |         |        |        |      |   |        |         |  



9



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##### Table of Contents



|(a) |  | Reflects reserves of CNAs property-casualty insurance subsidiaries,
excluding CIC reserves, which were acquired on May 10, 1995 (the
Acquisition Date). Accordingly, the reserve development (net reserves
recorded at the end of the year, as initially estimated, less net reserves
re-estimated as of subsequent years) does not include CIC.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Includes CIC gross reserves of $9,713 million and net reserves of $6,063
million acquired on the Acquisition Date and subsequent development
thereon.                                                                                                                                                                                            
|   
|(c) |  | Ceded recoverable includes reserves transferred under retroactive
reinsurance agreements of $784 million as of December 31, 1999.                                                                                                                                                                                                                
|   
|(d) |  | Effective January 1,2001, CNA established a new life insurance company,
CNAGLAC. Further, on January 1, 2001 approximately $1,055M of reserves
were transferred from CCC to CNAGLAC                                                                                                                                                              



| |                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Additional information as to CNAs property-casualty claim and claim adjustment
expense reserves and reserve development is set forth in Notes A and F of the
Consolidated Financial Statements of the 2001 Annual Report to Shareholders,
incorporated by reference in Item 8, herein.



| |            
| | -----------
| | Investments



| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Information on the Companys investments is set forth in Notes B, C and D of
the Consolidated Financial Statements of the 2001 Annual Report to
Shareholders, incorporated by reference in Item 8, herein.



| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Additional information on the Companys investments is also set forth in the
Managements Discussion and Analysis section of the 2001 Annual Report to
Shareholders, incorporated by reference in Item 7, herein.

10



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##### Table of Contents






ITEM 2. PROPERTIES

CNA Plaza, owned by CAC, serves as the home office for CNAF and its
subsidiaries. An adjacent building (located at 55 E. Jackson Blvd.), jointly
owned by CCC and CAC, is partially situated on grounds under leases expiring in
2058. Approximately 46% of the adjacent building is rented to non-affiliates.
CNAFs subsidiaries lease office space in various cities throughout the United
States and in other countries. The following table sets forth certain
information with respect to the principal office buildings owned or leased by
CNAFs subsidiaries:

|                                                 |  |                    |           |                 |  |                                     |  | 
|------------------------------------------------ |  | ------------------ | --------- | --------------- |  | ----------------------------------- |  | 
|                                                 |  | Amount (Square     |           |                 |  |                                    
|                                                 |  | Feet) Of Building  |           |                 |  |                                    
|                                                 |  | Owned and Occupied |           |                 |  |                                    
|Location                                         |  | or Leased by CNA   |           | Principal Usage
|                                                 |  |                    |           |                
|CNA Plaza 333 S. Wabash Chicago,
Illinois        |  |                    | 1,144,378 | (1)             |  | Principal executive offices of CNAF
|55 E. Jackson Blvd. Chicago, Illinois            |  |                    | 440,292   | (1)             |  | Principal executive offices of CNAF
|100 CNA Drive Nashville, Tennessee               |  |                    | 251,363   | (1)             |  | Life insurance offices             
|1111 E. Broad St. Columbus, Ohio                 |  |                    | 225,470   | (1)             |  | Property-casualty insurance offices
|40 Wall Street New York, New York                |  |                    | 199,238   | (2)             |  | Property-casualty insurance offices
|1110 Ward Avenue Honolulu, Hawaii                |  |                    | 186,687   | (1)             |  | Property-casualty insurance offices
|2405 Lucien Way Maitland, Florida                |  |                    | 178,744   | (2)             |  | Property-casualty insurance offices
|3500 Lacey Road Downers Grove, Illinois          |  |                    | 168,793   | (2)             |  | Property-casualty insurance offices
|333 Glen Street Glens Falls, New York            |  |                    | 164,032   | (1)             |  | Property-casualty insurance offices
|1100 Cornwall Road Monmouth Junction,
New Jersey |  |                    | 147,884   | (2)             |  | Property-casualty insurance offices
|600 North Pearl Street Dallas, Texas             |  |                    | 139,151   | (2)             |  | Property-casualty insurance offices

(1)  Represents property owned by CNAF or its
subsidiaries.
(2)  Represents property leased by CNAF or its subsidiaries.




ITEM 3. LEGAL PROCEEDINGS

Information on CNAs legal proceedings is set forth in Note G of the
Consolidated Financial Statements of the 2001 Annual Report to Shareholders,
incorporated by reference in Item 8, herein.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

11



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##### Table of Contents






PART II




ITEM 5. MARKET FOR THE
REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Incorporated herein by reference from
pages 124 and 125 of the 2001 Annual Report to
Shareholders.




ITEM 6. SELECTED FINANCIAL DATA

Incorporated herein by reference from page 1 of the 2001 Annual Report to
Shareholders.




ITEM 7. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Incorporated herein by reference from pages 6 through 56 of the 2001 Annual
Report to Shareholders.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Incorporated herein by reference from pages 42 through 47 of the 2001 Annual
Report to Shareholders.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Statements of Operations  Years Ended December 31, 2001, 2000 and
1999

Consolidated Balance Sheets  December 31, 2001 and 2000

Consolidated Statements of Cash Flows  Years Ended December 31, 2001, 2000 and
1999

Consolidated Statements of Stockholders Equity  Years Ended December 31,
2001, 2000 and 1999

Notes to Consolidated Financial Statements

Independent Auditors Report

The above Consolidated Financial Statements, the related Notes to the
Consolidated Financial Statements and the Independent Auditors Report are
incorporated herein by reference from pages 57 through 121 of the 2001 Annual
Report to Shareholders.




ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

12



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##### Table of Contents






PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS OF THE
REGISTRANT

|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  |                                                 |  | 
|--------------------- |  | -------------------- |  |  | --- |  |  | -------------- | ------------ |  | ---------------------------------------------------- | ------------------------------------------ |  | ----------------------------------------------- |  | 
|                      |  | POSITION AND OFFICES |  |  |     |  |  |                | FIRST BECAME |  |                                                      |                                            |  |                                                
|NAME                  |  | HELD WITH REGISTRANT |  |  | AGE |  |  | OFFICER OF CNA |              |  | PRINCIPAL OCCUPATION DURING PAST FIVE YEARS          |                                           
|Laurence A. Tisch     |  | Chief Executive      |  |  | 79  |  |  | 1974           |              |  | Co-Chairman of the Board of Loews                   
|                      |  | Officer, CNA         |  |  |     |  |  |                |              |  |                                                      | Corporation since January 1999. Chief     
|                      |  | Financial            |  |  |     |  |  |                |              |  |                                                      | Executive Officer of CNA and Director of  
|                      |  | Corporation          |  |  |     |  |  |                |              |  |                                                      | Automatic Data Processing, Inc. and Bulova
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Corporation.  Prior to 1999, Mr. Tisch had     
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | been Co-Chairman of the Board and Co-Chief     
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Executive Officer of Loews since 1994.         
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Executive Officer of the Registrant since 1974.
|Bernard L             |  | Chairman of the      |  |  | 55  |  |  | 1980           |              |  | Chairman of the Board and Chief Executive           
|Hengesbaugh           |  | Board and Chief      |  |  |     |  |  |                |              |  |                                                      | Officer of CNA insurance companies since  
|                      |  | Executive Officer,   |  |  |     |  |  |                |              |  |                                                      | February 1999.  Executive Vice President  
|                      |  | CNA insurance        |  |  |     |  |  |                |              |  |                                                      | and Chief Operating Officer of CNA        
|                      |  | companies            |  |  |     |  |  |                |              |  |                                                      | Insurance companies from February 1998    
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | until February 1999.  Senior Vice              
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | President of CNA Insurance Companies since     
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | November 1990.  Executive Officer of the       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Registrant since 1996.                         
|Robert V. Deutsch     |  | Executive Vice       |  |  | 42  |  |  | 1999           |              |  | Executive Vice President and Chief Financial Officer
|                      |  | President and Chief  |  |  |     |  |  |                |              |  |                                                      | of CNA Financial Corporation and          
|                      |  | Financial Officer,   |  |  |     |  |  |                |              |  |                                                      | subsidiaries since August 1999.  From June
|                      |  | CNA Financial        |  |  |     |  |  |                |              |  |                                                      | 1987 until August 1999, Mr. Deutsch was   
|                      |  | Corporation          |  |  |     |  |  |                |              |  |                                                      | Executive Vice President, Chief Financial 
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Officer, Chief Actuary and Assistant           
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Secretary of Executive Risk, Inc.              
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Executive Officer of the Registrant since 1999.
|Stephen W. Lilienthal |  | President and Chief  |  |  | 52  |  |  | 2001           |              |  | President and Chief Executive Officer,              
|                      |  | Executive Officer,   |  |  |     |  |  |                |              |  |                                                      | Property-casualty Operations of the CNA   
|                      |  | Property & Casualty  |  |  |     |  |  |                |              |  |                                                      | insurance companies since July 2001.  From
|                      |  | Operations, CNA      |  |  |     |  |  |                |              |  |                                                      | June 1993 to June 1998, senior officer of 
|                      |  | insurance companies  |  |  |     |  |  |                |              |  |                                                      | USF&G Corporation (USFG).  In April 1998, 
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | USF&G was acquired by the St. Paul             
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Companies.  Mr. Lilienthal was Executive       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Vice President of the St. Paul Companies       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | until July 2001.  Executive Officer of the     
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Registrant since 2001.                         
|Debra L. McClenahan   |  | President and Chief  |  |  | 49  |  |  | 2002           |              |  | President and Chief Executive Officer, CNA          
|                      |  | Executive Officer,   |  |  |     |  |  |                |              |  |                                                      | Re Operations of the CNA insurance        
|                      |  | CNA Re Operations,   |  |  |     |  |  |                |              |  |                                                      | companies since February 2002.  From 1993 
|                      |  | CNA insurance        |  |  |     |  |  |                |              |  |                                                      | to December 2001, Ms. McClenahan has held 
|                      |  | companies            |  |  |     |  |  |                |              |  |                                                      | various officer positions with the CNA    
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | insurance companies.                           
|Robert W. Patin       |  | President and Chief  |  |  | 59  |  |  | 2001           |              |  | President and Chief Executive Officer, CNA          
|                      |  | Executive Officer,   |  |  |     |  |  |                |              |  |                                                      | Life and Group Operations of the CNA      
|                      |  | CNA
Life and Group   |  |  |     |  |  |                |              |  |                                                      | insurance companies since January 2001.   
|                      |  | Operations, CNA      |  |  |     |  |  |                |              |  |                                                      | Prior to that, Mr. Patin was President and
|                      |  | insurance companies  |  |  |     |  |  |                |              |  |                                                      | Chief Operating Officer of Big Idea       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Productions from 1998 to 2001.  From 1988      
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | until 1998, he was Chairman of the Board       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | and Chief Executive Officer of Washington      
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | National Corp.  Executive Officer of the       
|                      |  |                      |  |  |     |  |  |                |              |  |                                                      |                                            |  | Registrant since 2001.                         

Officers are elected and hold office until their successors are elected and
qualified, and are subject to removal by the Board of Directors.

Additional information required in Item 10, Part III has been omitted as the
Registrant intends to file a definitive proxy statement pursuant to Regulation
14A with the Securities and Exchange Commission not later than 120 days after
the close of its fiscal year.

13



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##### Table of Contents






ITEM 11. EXECUTIVE COMPENSATION

Information required in Item 11, Part III has been omitted as the Registrant
intends to file a definitive proxy statement pursuant to Regulation 14A with
the Securities and Exchange Commission not later than 120 days after the close
of its fiscal year.




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information required in Item 12, Part III has been omitted as the Registrant
intends to file a definitive proxy statement pursuant to Regulation 14A with
the Securities and Exchange Commission not later than 120 days after the close
of its fiscal year.




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required in Item 13, Part III has been omitted as the Registrant
intends to file a definitive proxy statement pursuant to Regulation 14A with
the Securities and Exchange Commission not later than 120 days after the close
of its fiscal year.

14



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##### Table of Contents






PART IV




ITEM 14. FINANCIAL STATEMENTS,
SCHEDULES, EXHIBITS AND REPORTS ON FORM 10-K

|    |  |    |  |                                                                                           |                                                                             |    |  |        | 
|--- |  | -- |  | ----------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | -- |  | ------ | 
|    |  |    |  |                                                                                           |                                                                             |    |  | Page   | 
|    |  |    |  |                                                                                           |                                                                             |    |  | Number | 
|    |  |    |  |                                                                                           |                                                                             |    |  |        | 
|   
|(a) |  | 1. |  | FINANCIAL STATEMENTS:                                                                     |                                                                             |    |  |       
|   
|    |  |    |  | A separate index
to the Consolidated Financial Statements is presented in Part II, Item 8 |                                                                             | 12 | 
|   
|(a) |  | 2. |  | FINANCIAL STATEMENT SCHEDULES:                                                            |                                                                             |    |  |       
|   
|    |  |    |  | Schedule I                                                                                | Summary of Investments                                                      | 18 | 
|    |  |    |  | Schedule II                                                                               | Condensed Financial Information
of Registrant (Parent Company)              | 19 | 
|    |  |    |  | Schedule III                                                                              | Supplementary Insurance Information                                         | 25 | 
|    |  |    |  | Schedule IV                                                                               | Reinsurance                                                                 | 26 | 
|    |  |    |  | Schedule V                                                                                | Valuation and Qualifying Accounts                                           | 26 | 
|    |  |    |  | Schedule VI                                                                               | Supplementary Information Concerning Property-Casualty Insurance Operations | 26 | 
|    |  |    |  | Independent Auditors' Report                                                              |                                                                             | 27 | 
|   

|    |  |      |           |                                                                                                                                                                                             |                        |      |  |               | 
|--- |  | ---- | --------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | ---- |  | ------------- | 
|(a) |  | 3.   | EXHIBITS: |                                                                                                                                                                                             |                        |      |  |               | 
|    |  |      |           |                                                                                                                                                                                             |                        |      |  |               | 
|    |  |      |           |                                                                                                                                                                                             | Description of Exhibit |      |  | ExhibitNumber | 
|    |  |      |           |                                                                                                                                                                                             |                        |      |  |               | 
|    |  | (3)  |           | Articles of incorporation and by-laws:                                                                                                                                                      |                        |      |  |              
|    |  |      |           | Certificate of
Incorporation of CNA Financial Corporation, as amended May 20, 1999
(Exhibit 3.1 to 1999 Form 10-K incorporated herein by reference.)                                        |                        | 3.1  | 
|   
|    |  |      |           | By-Laws of CNA
Financial Corporation, as amended February 10, 1999 (Exhibit 3.2 to
1998 Form 10-K incorporated herein by reference.)                                                        |                        | 3.2  | 
|   
|    |  | (4)  |           | Instruments defining the rights of security holders, including indentures:                                                                                                                  |                        |      |  |              
|    |  |      |           | CNA Financial
Corporation hereby agrees to furnish to the Commission upon request
copies of instruments with respect to long-term debt, pursuant to
Item 601(b) (4) (iii) of Regulation S-K |                        | 4.1  | 
|   
|    |  | (10) |           | Material contracts:                                                                                                                                                                         |                        |      |  |               | 
|   
|    |  |      |           | Federal Income
Tax Allocation Agreement dated February 29, 1980 between CNA
Financial Corporation and Loews Corporation (Exhibit 10.2 to 1987
Form 10-K incorporated herein by reference.)  |                        | 10.1 | 

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| |      |                                                                                                                                                                                                                                                   |                                                   |  |        |        |         |  | 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- |  | ------ | ------ | ------- |  | 
| |      |                                                                                                                                                                                                                                                   |                                                   |  |        |        | Exhibit | 
| |      |                                                                                                                                                                                                                                                   | Description
of Exhibit                            |  |        | Number |        
| | (10) |                                                                                                                                                                                                                                                   | Material contracts (continued):                   |  |        |        |        
| |      | Continuing
Services Agreement between CNA Financial Corporation and Edward J.
Noha, dated February 27, 1991 (Exhibit 6.0 to 1991 Form 8-K, filed
March 18, 1991, incorporated herein by reference.)                                               |                                                   |  | 10.2   |       
|
| |      | CNA Employees'
Supplemental Savings Plan, as amended through January 1, 1994
(Exhibit 10.3 to 1999 Form 10-K incorporated herein by reference.)                                                                                                   |                                                   |  | 10.3   |       
|
| |      | CNA Employees'
Retirement Benefit Equalization Plan, as amended through January 1,
1994 (Exhibit 10.4 to 1999 Form 10-K incorporated herein by reference.)                                                                                        |                                                   |  | 10.4   |       
|
| |      | Continental
Casualty Company "CNA" Annual Incentive Bonus Plan Provisions
(Exhibit 10.1 to 1994 Form 10-K incorporated herein by reference.)                                                                                                      |                                                   |  | 10.5   |       
|
| |      | Continuing
Services Agreement between CNA Financial Corporation and Dennis H.
Chookaszian, dated February 9, 1999 (Exhibit 10.2 to 1998 Form 10-K
incorporated herein by reference.)                                                              |                                                   |  | 10.6   |       
|
| |      | Employment
Agreement between CNA Financial Corporation and Bernard Hengesbaugh,
dated November 2, 2000 (Exhibit 10 to September 30, 2000 Form 10-Q
incorporated herein by reference.)                                                             |                                                   |  | 10.7   |       
|
| |      | CNA Financial
Corporation 2000 Long-Term Incentive Plan, dated August 4, 1999
(Exhibit 4.1 to 1999 Form S-8 filed August 4, 1999, incorporated herein by reference.)                                                                              |                                                   |  | 10.8   |       
|
| |      | Employment
Agreement between CNA Financial Corporation and Robert V. Deutsch,
dated August 16, 1999 (Exhibit 10 to September 30, 1999 Form 10-Q
incorporated herein by reference.)                                                                |                                                   |  | 10.9   |       
|
| |      | Employment
Agreement between CNA Financial Corporation and Thomas F. Taylor
dated November 2, 1999 (Exhibit 10.14 to 1999 Form 10-K incorporated herein by reference.)                                                                            |                                                   |  | 10.10  |       
|
| |      | Sale and Purchase
Agreement between CNA Financial Corporation and PGI-WvF 180, L.P.
dated October 13, 2000 for the sale of real property commonly known
as 180 Maiden Lane (Exhibit 10.11 to the 2000 Form
10-K incorporated herein by reference) |                                                   |  | 10.11  |       
|
| |      | Employment
Agreement between CNA Financial Corporation and Stephen W. Lilienthal dated July 23, 2001                                                                                                                                              |                                                   |  | 10.12* |       
|
| | (12) |                                                                                                                                                                                                                                                   | Computation of Ratio of Earnings to Fixed Charges |  |        | 12.1*  |        

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|    |  |      |  |                                                                                                                                                                                                                                                                                                                                                                 |  |       |        |         | 
|--- |  | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | ------ | ------- | 
|    |  |      |  |                                                                                                                                                                                                                                                                                                                                                                 |  |       |        | Exhibit
|    |  |      |  | Description
of Exhibit                                                                                                                                                                                                                                                                                                                                          |  |       | Number
|    |  |      |  |                                                                                                                                                                                                                                                                                                                                                                 |  |       |       
|   
|    |  | (13) |  | 2001 Annual Report                                                                                                                                                                                                                                                                                                                                              |  | 13.1*
|   
|    |  | (21) |  | Primary Subsidiaries of CNAF                                                                                                                                                                                                                                                                                                                                    |  | 21.1*
|   
|    |  | (23) |  | Independent Auditors' Consent                                                                                                                                                                                                                                                                                                                                   |  | 23.1*
|   
|   
|    |  |      |  | *Filed herewith                                                                                                                                                                                                                                                                                                                                                 |  |       |       
|   
|(b) |  |      |  | Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                            |  |       |       
|   
|   
|    |  |      |  | On December 5,
2001 CNA Financial Corporation issued a press release announcing its
estimate for potential losses associated with the recent filing by
certain Enron entities for reorganization under Chapter 11 of the Bankruptcy Code.                                                                                                                       |  |       |       
|   
|    |  |      |  | On December 5,
2001 CNA Financial Corporation issued a press release announcing that
it will record fourth quarter charges related principally to
restructuring its Property-Casualty and Life Operations,
discontinuation of variable life and annuity business, and
consolidation of real estate locations and related corporate staff departments reduction. |  |       |       
|   
|(c) |  |      |  | Exhibits:                                                                                                                                                                                                                                                                                                                                                       |  |       |       
|    |  |      |  | None.                                                                                                                                                                                                                                                                                                                                                           |  |       |       
|   
|(d) |  |      |  | Condensed Financial Information of Unconsolidated Subsidiaries:                                                                                                                                                                                                                                                                                                 |  |       |       
|    |  |      |  | None.                                                                                                                                                                                                                                                                                                                                                           |  |       |       

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SCHEDULE I. SUMMARY OF INVESTMENTS

|                                                   |                                 |                                                                            |        |                   |        |   |           |       |        |          |        |     |        | 
|-------------------------------------------------- | ------------------------------- | -------------------------------------------------------------------------- | ------ | ----------------- | ------ | - | --------- | ----- | ------ | -------- | ------ | --- | ------ | 
|                                                   |                                 |                                                                            |        | December 31, 2001 |       
|                                                   |                                 |                                                                            |        |                   |       
|                                                   |                                 |                                                                            |        | Cost or           |        |   | Estimated |       |        |          |        |    
|                                                   |                                 |                                                                            |        | Amortized         |        |   | Fair      |       |        | Carrying |       
|(In millions)                                      |                                 | Cost                                                                       |        |                   | Value  |   |           | Value |       
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |       
|Fixed maturity securities available-for-sale:      |                                 |                                                                            |        |                   |        |   |           |       |        |          |        |    
|                                                   | Bonds:                          |                                                                            |        |                   |        |   |           |       |        |          |        |     |       
|                                                   |                                 | United States Government and government agencies and
authorities  taxable |        | $                 | 6,244  |   |           | $     | 6,352  |          |        | $   | 6,352  | 
|                                                   |                                 | States, municipalities and political subdivisions  tax exempt             |        |                   | 2,748  |   |           |       | 2,720  |          |        |     | 2,720  | 
|                                                   |                                 | Foreign governments and political subdivisions                             |        |                   | 1,930  |   |           |       | 1,843  |          |        |     | 1,843  | 
|                                                   |                                 | Public utilities                                                           |        |                   | 1,713  |   |           |       | 1,800  |          |        |     | 1,800  | 
|                                                   |                                 | Convertibles and bonds with warrants attached                              |        |                   | 85     |   |           |       | 84     |          |        |     | 84     | 
|                                                   |                                 | All other corporate bonds                                                  |        |                   | 16,202 |   |           |       | 16,317 |          |        |     | 16,317 | 
|                                                   | Redeemable preferred stocks     |                                                                            |        | 48                |        |   |           | 48    |        |          |        | 48  |       
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |       
|Total fixed maturity securities available-for-sale |                                 |                                                                            | 28,970 |                   |        |   | 29,164    |       |        |          | 29,164 |    
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |       
|Equity securities available-for-sale:              |                                 |                                                                            |        |                   |        |   |           |       |        |          |        |    
|                                                   | Common stocks:                  |                                                                            |        |                   |        |   |           |       |        |          |        |     |       
|                                                   |                                 | Banks, trusts and insurance companies                                      |        |                   | 35     |   |           |       | 46     |          |        |     | 46     | 
|                                                   |                                 | Public utilities                                                           |        |                   | 21     |   |           |       | 22     |          |        |     | 22     | 
|                                                   |                                 | Industrial and other                                                       |        |                   | 764    |   |           |       | 928    |          |        |     | 928    | 
|                                                   | Non-redeemable preferred stocks |                                                                            |        | 348               |        |   |           | 342   |        |          |        | 342 |       
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |       
|Total equity securities available-for-sale         |                                 |                                                                            | 1,168  |                   |        | $ | 1,338     |       |        |          | 1,338  |    
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |       
|Mortgage Loans                                     |                                 |                                                                            | 31     |                   |        |   |           |       |        |          | 31     |    
|Real estate                                        |                                 |                                                                            | 4      |                   |        |   |           |       |        |          | 4      |    
|Policy loans                                       |                                 |                                                                            | 194    |                   |        |   |           |       |        |          | 194    |    
|Other invested assets                              |                                 |                                                                            | 1,340  |                   |        |   |           |       |        |          | 1,355  |    
|Short-term investments                             |                                 |                                                                            | 3,759  |                   |        |   |           |       |        |          | 3,740  |    
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |        |         
|Total investments                                  |                                 | $                                                                          | 35,466 |                   |        |   |           |       |        | $        | 35,826 |    
|                                                   |                                 |                                                                            |        |                   |        |   |           |       |        |         

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SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)

|                                           |                                                                      |                            |        |       |       |   |        |        |       | 
|------------------------------------------ | -------------------------------------------------------------------- | -------------------------- | ------ | ----- | ----- | - | ------ | ------ | ----- | 
|Parent Company                             |                                                                      |                            |        |       |       |   |        |       
|Financial Position                         |                                                                      |                            |        |       |       |   |        |       
|December 31,                               |                                                                      | 2001                       |        |       | 2000  |  
|(In millions)                              |                                                                      |                            |        |       |       |  
|Assets:                                    |                                                                      |                            |        |       |       |   |        |       
|                                           | Investment in subsidiaries                                           |                            | $      | 9,566 |       |   | $      | 11,806 |      
|                                           | Fixed maturity securities available-for-sale (amortized cost of $15) |                            |        | 15    |       |   |        |       |      
|                                           | Equity securities available-for-sale (cost of $1)                    |                            |        | 1     |       |   |        |       |      
|                                           | Short-term investments                                               |                            |        | 5     |       |   |        |       |      
|                                           | Amounts due from affiliates                                          |                            |        | 680   |       |   |        |       |      
|                                           | Notes receivable from affiliates                                     |                            |        | 341   |       |   |        | 454    |      
|                                           | Other                                                                |                            |        | 3     |       |   |        | 6      |      
|                                           |                                                                      |                            |        |       |       |  
|Total assets                               |                                                                      | $                          | 10,611 |       |       | $ | 12,266 |       
|                                           |                                                                      |                            |        |       |       |  
|Liabilities:                               |                                                                      |                            |        |       |       |   |        |       
|                                           | Debt                                                                 |                            | $      | 2,229 |       |   | $      | 2,355  |      
|                                           | Amounts due to affiliates                                            |                            |        |      |       |   |        | 260    |      
|                                           | Other                                                                |                            |        | 15    |       |   |        | 4      |      
|                                           |                                                                      |                            |        |       |       |  
|                                           |                                                                      | Total Liabilities          |        |       | 2,244 |   |        |        | 2,619 | 
|                                           |                                                                      |                            |        |       |       |  
|Stockholders equity:                      |                                                                      |                            |        |       |       |   |        |       
|                                           | Other comprehensive income                                           |                            |        | 226   |       |   |        | 873    |      
|                                           | Other stockholders equity                                           |                            |        | 8,141 |       |   |        | 8,774  |      
|                                           |                                                                      |                            |        |       |       |  
|                                           |                                                                      | Total stockholders equity |        |       | 8,367 |   |        |        | 9,647 | 
|                                           |                                                                      |                            |        |       |       |  
|Total liabilities and stockholders equity |                                                                      | $                          | 10,611 |       |       | $ | 12,266 |       
|                                           |                                                                      |                            |        |       |       |  

See accompanying Notes to Condensed Financial Information.

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|                                                                                                                                              |                                    |                |        |     |      |   |       |      |     |   |      |     |     | 
|--------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | -------------- | ------ | --- | ---- | - | ----- | ---- | --- | - | ---- | --- | --- | 
|Parent Company                                                                                                                                |                                    |                |        |     |      |   |       |      |     |   |      |    
|Results of Operations                                                                                                                         |                                    |                |        |     |      |   |       |      |     |   |      |    
|Years ended December 31,                                                                                                                      |                                    | 2001           |        |     | 2000 |   |       | 1999 |    
|(In millions)                                                                                                                                 |                                    |                |        |     |      |   |       |      |    
|Revenues:                                                                                                                                     |                                    |                |        |     |      |   |       |      |     |   |      |    
|                                                                                                                                              | Net investment income              |                | $      | 18  |      |   | $     | 11   |     |   | $    | 8   |    
|                                                                                                                                              | Realized investment (losses) gains |                |        | (5  | )    |   |       | (4   | )   |   |      | 8   |    
|                                                                                                                                              | Other income                       |                |        | 13  |      |   |       | 38   |     |   |      | 25  |    
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    
|                                                                                                                                              |                                    | Total revenues |        |     | 26   |   |       |      | 45  |   |      |     | 41  | 
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    
|Expenses:                                                                                                                                     |                                    |                |        |     |      |   |       |      |     |   |      |    
|                                                                                                                                              | Administrative and general         |                |        | 161 |      |   |       | 208  |     |   |      | 206 |    
|                                                                                                                                              | Interest                           |                |        | 140 |      |   |       | 175  |     |   |      | 160 |    
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    
|                                                                                                                                              |                                    | Total expenses |        |     | 301  |   |       |      | 383 |   |      |     | 366 | 
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    
|Loss from operations before income taxes,
equity in net income of subsidiaries and
the cumulative effects of changes in
accounting principles |                                    |                | (275   | )   |      |   | (338  | )    |     |   | (325 | )  
|Income tax benefit                                                                                                                            |                                    |                | 96     |     |      |   | 118   |      |     |   | 114  |    
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    
|Loss before equity in net income of
subsidiaries and the cumulative effects of
changes in accounting principles                               |                                    |                | (179   | )   |      |   | (220  | )    |     |   | (211 | )  
|Equity in net (loss) income of subsidiaries                                                                                                   |                                    |                | (1,404 | )   |      |   | 1,434 |      |     |   | 258  |    
|Cumulative effects of changes in
accounting principles, net of tax of $33,
$0 and $95                                                         |                                    |                | (61    | )   |      |   |      |      |     |   | (177 | )  
|Net (loss) income                                                                                                                             |                                    | $              | (1,644 | )   |      | $ | 1,214 |      |     | $ | (130 | )  
|                                                                                                                                              |                                    |                |        |     |      |   |       |      |    

See accompanying Notes to Condensed Financial Information.

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|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |      |      |     | 
|------------------------------------------------------ | --------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ----------------- | ------ | ----- | ----- | ---- | ----- | ------ | ---- | ---- | ---- | ---- | --- | 
|Parent Company                                         |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|Cash flows                                             |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|Years ended December 31,                               |                                                                                         | 2001                                                               |                   |        | 2000  |       |      | 1999  |       
|(In millions)                                          |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Cash flows from operating activities:                  |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|                                                       | Net (loss) income                                                                       |                                                                    | $                 | (1,644 | )     |       | $    | 1,214 |        |      | $    | (130 | )   
|                                                       | Adjustments to reconcile net (loss) income to net cash flows from
operating activities: |                                                                    |                   |        |       |       |      |       |        |      |      |      |     
|                                                       |                                                                                         | Loss (income) of subsidiaries, net of distributions                |                   |        | 1,897 |       |      |       | (1,005 | )    |      |      | 350  |    
|                                                       |                                                                                         | Cumulative effects of changes in accounting principles, net of tax |                   |        | 61    |       |      |       |       |      |      |      | 177  |    
|                                                       |                                                                                         | Realized losses (gains)                                            |                   |        | 5     |       |      |       | 4      |      |      |      | (8   | )  
|                                                       | Changes in:                                                                             |                                                                    |                   |        |       |       |      |       |        |      |      |      |     
|                                                       |                                                                                         | Other, net                                                         |                   |        | 102   |       |      |       | 183    |      |      |      | 29   |    
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|                                                       |                                                                                         |                                                                    | Total Adjustments |        |       | 2,065 |      |       |        | (818 | )    |      |      | 548 | 
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|                                                       |                                                                                         | Net cash flows provided by operating activities                    |                   |        | 421   |       |      |       | 396    |      |      |      | 418  |    
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Cash flows from investing activities:                  |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|                                                       | Purchases of fixed maturity securities                                                  |                                                                    |                   | (15    | )     |       |      |      |        |      |      |     |     
|                                                       | Purchases of equity securities                                                          |                                                                    |                   | (1     | )     |       |      |      |        |      |      |     |     
|                                                       | Change in short-term investments                                                        |                                                                    |                   | (5     | )     |       |      | 3     |        |      |      |     |     
|                                                       | Capital contributions to subsidiaries, net                                              |                                                                    |                   | (1,401 | )     |       |      | (165  | )      |      |      | (198 | )   
|                                                       | Change
in notes receivable from affiliates                                              |                                                                    |                   | 113    |       |       |      | 80    |        |      |      | (20  | )   
|                                                       | Other, net                                                                              |                                                                    |                   | 4      |       |       |      | 9     |        |      |      |     |     
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Net cash flows used by investing activities            |                                                                                         |                                                                    | (1,305            | )      |       |       | (73  | )     |        |      | (218 | )   
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Cash flows from financing activities:                  |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|                                                       | Dividends paid to preferred shareholders                                                |                                                                    |                   |       |       |       |      | (1    | )      |      |      | (13  | )   
|                                                       | Proceeds from issuance of debt                                                          |                                                                    |                   | 500    |       |       |      |      |        |      |      | 175  |     
|                                                       | Principal payments on debt                                                              |                                                                    |                   | (627   | )     |       |      | (137  | )      |      |      | (158 | )   
|                                                       | Issuance of common stock                                                                |                                                                    |                   | 1,006  |       |       |      |      |        |      |      |     |     
|                                                       | Redemption of cumulative exchangeable preferred stock                                   |                                                                    |                   |       |       |       |      | (150  | )      |      |      | (200 | )   
|                                                       | Purchase of treasury stock                                                              |                                                                    |                   | 1      |       |       |      | (35   | )      |      |      |     |     
|                                                       | Other, net                                                                              |                                                                    |                   | 4      |       |       |      | (4    | )      |      |      |     |     
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Net cash flows provided (used) by financing activities |                                                                                         |                                                                    | 884               |        |       |       | (327 | )     |        |      | (196 | )   
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Net change in cash and cash equivalents                |                                                                                         |                                                                    |                  |        |       |       | (4   | )     |        |      | 4    |     
|Cash and cash equivalents, beginning of year           |                                                                                         |                                                                    |                  |        |       |       | 4    |       |        |      |     |     
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Cash and cash equivalents, end of year                 |                                                                                         | $                                                                  |                  |        |       | $     |     |       |        | $    | 4    |     
|                                                       |                                                                                         |                                                                    |                   |        |       |       |      |       |       
|Supplemental disclosures of cash flow information:     |                                                                                         |                                                                    |                   |        |       |       |      |       |        |      |      |     
|                                                       | Cash paid (received):                                                                   |                                                                    |                   |        |       |       |      |       |        |      |      |      |     
|                                                       |                                                                                         | Interest                                                           |                   | $      | 137   |       |      | $     | 168    |      |      | $    | 169  |    
|                                                       |                                                                                         | Federal income taxes                                               |                   |        | (288  | )     |      |       | (154   | )    |      |      | (279 | )  
|                                                       | Non-cash transactions:                                                                  |                                                                    |                   |        |       |       |      |       |        |      |      |      |     
|                                                       |                                                                                         | Notes receivable for the issuance of common stock                  |                   |        | 4     |       |      |       | 10     |      |      |      | 20   |    

See accompanying Notes to Condensed Financial Information.

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See accompanying Notes to Condensed Financial Information.

Notes to Condensed Financial Information

A. Basis of presentation

The condensed financial information of CNA Financial Corporation (CNAF or the
Parent Company) should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in the CNA Financial Corporation 2001
Annual Report to Shareholders. CNAFs subsidiaries are accounted for using the
equity method of accounting. Equity in net income of these affiliates is
reported as equity in net income of subsidiaries.

Certain amounts applicable to prior years have been reclassified to conform to
classifications followed in 2001.

B. Investments

CNAF classifies its fixed maturity securities (bonds and redeemable preferred
stocks) and its equity securities as available-for-sale, and as such, they are
carried at fair value. The amortized cost of fixed maturity securities is
adjusted for amortization of premiums and accretion of discounts to maturity,
which are included in net investment income. Changes in fair value are
reported as a component of other comprehensive income. Investments are written
down to estimated fair values and losses are recognized in income when a
decline in value is determined to be other than temporary.

All securities transactions are recorded on the trade date. Realized investment
gains and losses are determined on the basis of the cost or amortized cost of
the specific securities sold.

CNAFs investments in fixed maturity securities are composed entirely of U.S.
Treasury securities and obligations of government agencies.

C. Debt

|                                                      |                              |      |       |     |      |   |       |     | 
|----------------------------------------------------- | ---------------------------- | ---- | ----- | --- | ---- | - | ----- | --- | 
|December 31                                           |                              | 2001 |       |     | 2000 |  
|(In millions)                                         |                              |      |       |     |      |  
|Variable rate debt:                                   |                              |      |       |     |      |   |       |    
|                                                      | Commercial paper             |      | $     |    |      |   | $     | 627 | 
|                                                      | Credit facility              |      |       | 500 |      |   |       |    | 
|Senior notes:                                         |                              |      |       |     |      |   |       |    
|                                                      | 6.25%, due November 15, 2003 |      |       | 250 |      |   |       | 249 | 
|                                                      | 6.50%, due April 15, 2005    |      |       | 491 |      |   |       | 491 | 
|                                                      | 6.75%, due November 15, 2006 |      |       | 249 |      |   |       | 249 | 
|                                                      | 6.45%, due January 15, 2008  |      |       | 149 |      |   |       | 149 | 
|                                                      | 6.60%, due December 15, 2008 |      |       | 199 |      |   |       | 199 | 
|                                                      | 6.95%, due January 15, 2018  |      |       | 148 |      |   |       | 148 | 
|7.25%, Debenture, due November 15, 2023               |                              |      | 240   |     |      |   | 240   |    
|1.00% Urban Development Action Grant, due May 7, 2019 |                              |      | 3     |     |      |   | 3     |    
|                                                      |                              |      |       |     |      |  
|Total                                                 |                              | $    | 2,229 |     |      | $ | 2,355 |    
|                                                      |                              |      |       |     |      |  

During 2001, the Parent Company discontinued its commercial paper program and
repaid all loans outstanding under the program. The weighted-average interest
rate on commercial paper was 7.24% at December 31, 2000.

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The funds used to retire the outstanding commercial paper debt were obtained
through the draw down of the full amount available under the Parent Companys
$500 million revolving credit facility. The facility is composed of two parts:
a $250 million component with a 364-day expiration date (with an option by CNAF
to turn this part of the facility into a one-year term loan) and a $250 million
component with a 3-year expiration date.

The Parent Company pays a facility fee, which varies based on the long-term
debt ratings of the Parent Company, to the lenders for having funds available
for loans under both components of the facility. At December 31, 2001, the
facility fee on the 364-day component was 15 basis points, and the facility fee
on the 3-year component was 17.5 basis points.

In addition to the facility fees, the Parent Company pays interest on any
outstanding debt/borrowings under the facility based on a rate determined using
the long-term debt ratings of the Parent Company. The interest rate is equal
to the London Interbank Offering Rate (LIBOR) plus 60 basis points for the
364-day component and LIBOR plus 57.5 basis points for the three-year
component. Further, if the Company has outstanding loans greater than 50% of
the amounts available under the facility, the Parent Company also will pay a
utilization fee of 12.5 basis points on such loans. At December 31, 2001, the
weighted-average interest rate on the borrowings under the facility, including
facility and utilization fees was 3.06%.

A Moodys Investors Service (Moodys) downgrade of the CNAF senior debt rating
from Baa2 to Baa3 would increase the facility fee on the 364-day component of
the facility from 15 basis points to 20 basis points, and the facility fee on
the three-year component would increase from 17.5 basis points to 25 basis
points. The applicable interest rate on the 364-day component would increase
from LIBOR plus 60 basis points to LIBOR plus 80 basis points and the
applicable interest rate on the three-year component would increase from LIBOR
plus 57.5 basis points to LIBOR plus 75 basis points. The utilization fee
would remain unchanged on both components at 12.5 basis points.

The $500 million revolving credit facility replaced CNAFs $750 million
revolving credit facility (the Prior Facility) which was scheduled to expire on
May 10, 2001. No loans were outstanding under the Prior Facility anytime
during 2001 or at December 31, 2000. To offset the variable rate
characteristics of the Prior Facility and the interest rate risk associated
with periodically reissuing commercial paper, the Parent Company was party to
interest rate swap agreements with several banks. While no agreements were
entered into for the year ended December  31, 2001, there were agreements in place during
2000 and 1999. These agreements required the Parent Company to pay interest at
a fixed rate in exchange for the receipt of the three-month LIBOR. The effect
of the interest rate swap agreements was to decrease interest expense by
approximately $2 million for the years ended December 31, 2000 and increase
interest expense by $4 million for the year ended December 31, 1999.

The combined weighted-average interest rate of all short-term debt, consisting
of facility fees and commercial paper borrowings, was 7.36% at December 31,
2000.

During 2000, the Parent Company repaid bank loans drawn under the CNAF credit
facility and repurchased approximately $38 million of its senior notes.

The terms of CNAFs credit facility requires the Parent Company to maintain
certain financial ratios and its subsidiaries to maintain certain combined
property-casualty company statutory surplus levels. At December 31, 2001 and
2000 CNAF was in compliance with all restrictive debt covenants.

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D. Management and administrative expenses

The Parent Company has reimbursed, or will reimburse, its subsidiaries for
certain general management and administrative expenses, certain extra
contractual obligations and certain investment expenses of $159 million, $200
million and $203 million in 2001, 2000 and 1999, respectively.

E. Capital transactions with subsidiaries

In 2001, 2000 and 1999, the Parent Company contributed capital of approximately
$1,416 million, $171 million and $207 million to its subsidiaries. In 2001,
2000 and 1999, CNAF subsidiaries returned capital of approximately $15 million,
$6 million and $9 million.

F. Dividends from subsidiaries and affiliates

In 2001, 2000 and 1999, the Parent Company received approximately $493 million,
$429 million and $608 million in dividends from subsidiaries included in its
consolidated financial statements.

The payment of dividends to CNAF by its insurance subsidiaries without prior
approval of the affiliates domiciliary state insurance commissioners is
limited by formula. This formula varies by state. The formula used by the
majority of the states provides that the greater of 10% of prior year statutory
surplus or prior year statutory net income, less the aggregate of all dividends
paid during the 12 months prior to date of payment, is available to be paid as
a dividend to the parent company.

Dividends from the CCC Pool are subject to the insurance holding company laws
of the State of Illinois, the domiciliary state of CCC. Under these laws,
ordinary dividends, or dividends that do not require prior approval
of the Department, may be paid only from earned
surplus, which is calculated by removing unrealized gains (which under
statutory accounting includes cumulative earnings of CCCs subsidiaries) from
unassigned surplus. As of December 31, 2001, CCC is in a negative earned
surplus position. In February 2002, the Department approved an
extraordinary dividend in the amount of $117 million to be used to fund CNAFs
2002 debt service requirements. Until CCC is in a positive earned surplus
position, all dividends require prior approval from the Department.

In addition, by agreement with the New Hampshire Insurance Department, as well
as certain other state insurance departments, dividend payments for The
Continental Insurance Company Pool are restricted to internal and external debt
service requirements through September 2003 up to a maximum of $85 million
annually, without the prior approval of the New Hampshire Insurance Department.

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SCHEDULE III. SUPPLEMENTARY INSURANCE INFORMATION

|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|----------------------- | ------------------------------------ | - | ----------- |  |  | --------- | ------ | ------ | -------- | - | ------------------------ | -------- |  | - | ------- | ------- |  | - | --- | --- | -
|                        |                                      |   |             |  |  |           |        |        |          |   | Gross Insurance Reserves |          |  |   |         |         | 
|                        |                                      |   |             |  |  |          
|                        |                                      |   | Deferred    |  |  | Claim     |        |        | Future   |   |                          |          |  |   |         | Policy- | 
|                        |                                      |   | Acquisition |  |  | And Claim |        |        | Policy   |   |                          | Unearned |  |   | holders
|                        | (in millions)                        |   | Costs       |  |  | Expenses  |        |        | Benefits |   |                          | Premiums |  |   | Funds  
|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |        
|December 31, 2001       |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |    
|                        | Standard Lines                       |   |             |  |  |           | $      | 12,766 |          |   | $                        |         |  |   | $       | 1,820   |  |   | $   | 54  |  
|                        | Specialty Lines                      |   |             |  |  |           |        | 5,751  |          |   |                          |         |  |   |         | 1,463   |  |   |     | 3   |  
|                        | CNA Re                               |   |             |  |  |           |        | 4,977  |          |   |                          |         |  |   |         | 201     |  |   |     | 2   |  
|                        | Group Operations                     |   |             |  |  |           |        | 2,200  |          |   |                          | 476      |  |   |         | 10      |  |   |     | 57  |  
|                        | Life Operations                      |   |             |  |  |           |        | 1,344  |          |   |                          | 6,492    |  |   |         | 134     |  |   |     | 433 |  
|                        | Corporate
and Other and Eliminations |   |             |  |  |           |        | 4,228  |          |   |                          | 338      |  |   |         | 877     |  |   |     | (3  | )
|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |        
|Consolidated Operations |                                      | $ | 2,424       |  |  | $         | 31,266 |        |          | $ | 7,306                    |          |  | $ | 4,505   |         |  | $ | 546 |    
|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |        
|December 31, 2000       |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |    
|                        | Standard Lines                       |   |             |  |  |           | $      | 12,070 |          |   | $                        |         |  |   | $       | 1,746   |  |   | $   | 61  |  
|                        | Specialty Lines                      |   |             |  |  |           |        | 4,813  |          |   |                          |         |  |   |         | 1,503   |  |   |     | 3   |  
|                        | CNA Re                               |   |             |  |  |           |        | 4,238  |          |   |                          |         |  |   |         | 369     |  |   |     | 2   |  
|                        | Group Operations                     |   |             |  |  |           |        | 2,063  |          |   |                          | 513      |  |   |         | 34      |  |   |     | 35  |  
|                        | Life Operations                      |   |             |  |  |           |        | 1,231  |          |   |                          | 5,864    |  |   |         | 116     |  |   |     | 504 |  
|                        | Corporate and Other and Eliminations |   |             |  |  |           |        | 2,547  |          |   |                          | 292      |  |   |         | 1,053   |  |   |     | (3  | )
|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |        
|Consolidated Operations |                                      | $ | 2,418       |  |  | $         | 26,962 |        |          | $ | 6,669                    |          |  | $ | 4,821   |         |  | $ | 602 |    
|                        |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |        
|December 31, 1999       |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |    
|                        | Standard Lines                       |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|                        | Specialty Lines                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|                        | CNA Re                               |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|                        | Group Operations                     |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|                        | Life Operations                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|                        | Corporate and Other and Eliminations |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |     |  
|Consolidated Operations |                                      |   |             |  |  |           |        |        |          |   |                          |          |  |   |         |         |  |   |     |    

|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |         |       |     |  |   |       |       |  
|----------------------- | ------------------------------------ | -------- | ---------- | ----- | -------- | ---------- | ----- | -------- | -------- | ------- | ---------- | ----------- | ----------- | ------------ | --------- | ----- | --------- | ------- | ----- | --- |  | - | ----- | ----- | -
|                        |                                      |          |            |       |          |            |       |          |          |         | Insurance  |             |             |              |           |       |           |         |       |     |  |   |      
|                        |                                      |          |            |       |          |            |       |          |          |         | Claims and |             |             | Amortization |           |       |           |         |       |     |  |   |      
|                        |                                      |          |            |       |          |            | Net   |          |          | Policy- |            |             | of Deferred |              |           | Other |           |         | Net   |    
|                        |                                      |          | Net Earned |       |          | Investment |       |          | holders' |         |            | Acquisition |             |              | Operating |       |           | Written |      
|(In millions)           |                                      | Premiums |            |       | Income** |            |       | Benefits |          |         | Costs      |             |             | Expenses     |           |       | Premiums* |        
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        
|December 31, 2001       |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |         |       |     |  |   |       |      
|                        | Standard Lines                       |          | $          | 2,454 |          |            | $     | 484      |          |         | $          | 2,497       |             |              | $         | 933   |           |         | $     | 551 |  |   | $     | 2,963 |  
|                        | Specialty Lines                      |          |            | 1,915 |          |            |       | 318      |          |         |            | 1,864       |             |              |           | 543   |           |         |       | 389 |  |   |       | 1,972 |  
|                        | CNA Re                               |          |            | 641   |          |            |       | 175      |          |         |            | 1,485       |             |              |           | 205   |           |         |       | 63  |  |   |       | 524   |  
|                        | Group Operations                     |          |            | 3,458 |          |            |       | 170      |          |         |            | 3,005       |             |              |           | (19   | )         |         |       | 648 |  |   |       | 2,183 |  
|                        | Life Operations                      |          |            | 954   |          |            |       | 618      |          |         |            | 1,283       |             |              |           | 142   |           |         |       | 152 |  |   |       | 438   |  
|                        | Corporate and Other and Eliminations |          |            | (57   | )        |            |       | 132      |          |         |            | 1,249       |             |              |           |      |           |         |       | 110 |  |   |       | (66   | )
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        
|Consolidated Operations |                                      | $        | 9,365      |       |          | $          | 1,897 |          |          | $       | 11,383     |             |             | $            | 1,804     |       |           | $       | 1,913 |     |  | $ | 8,014 |      
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        
|December 31, 2000       |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |         |       |     |  |   |       |      
|                        | Standard Lines                       |          | $          | 3,970 |          |            | $     | 736      |          |         | $          | 3,279       |             |              | $         | 965   |           |         | $     | 544 |  |   | $     | 3,869 |  
|                        | Specialty Lines                      |          |            | 1,868 |          |            |       | 383      |          |         |            | 1,252       |             |              |           | 465   |           |         |       | 343 |  |   |       | 1,954 |  
|                        | CNA Re                               |          |            | 1,089 |          |            |       | 212      |          |         |            | 888         |             |              |           | 263   |           |         |       | 38  |  |   |       | 951   |  
|                        | Group Operations                     |          |            | 3,675 |          |            |       | 163      |          |         |            | 3,068       |             |              |           | 17    |           |         |       | 731 |  |   |       | 1,497 |  
|                        | Life Operations                      |          |            | 876   |          |            |       | 620      |          |         |            | 1,104       |             |              |           | 169   |           |         |       | 142 |  |   |       | 388   |  
|                        | Corporate and Other and Eliminations |          |            | (4    | )        |            |       | 172      |          |         |            | 240         |             |              |           | 1     |           |         |       | 2   |  |   |       | (19   | )
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |         |      
|Consolidated Operations |                                      | $        | 11,474     |       |          | $          | 2,286 |          |          | $       | 9,831      |             |             | $            | 1,880     |       |           | $       | 1,800 |     |  | $ | 8,640 |      
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        
|December 31, 1999       |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |         |       |     |  |   |       |      
|                        | Standard Lines                       |          | $          | 4,241 |          |            | $     | 709      |          |         | $          | 3,660       |             |              | $         | 976   |           |         | $     | 573 |  |   | $     | 4,113 |  
|                        | Specialty Lines                      |          |            | 1,942 |          |            |       | 372      |          |         |            | 1,457       |             |              |           | 698   |           |         |       | 115 |  |   |       | 1,972 |  
|                        | CNA Re                               |          |            | 1,176 |          |            |       | 170      |          |         |            | 998         |             |              |           | 290   |           |         |       | 76  |  |   |       | 1,275 |  
|                        | Group Operations                     |          |            | 3,571 |          |            |       | 137      |          |         |            | 3,053       |             |              |           | (19   | )         |         |       | 719 |  |   |       | 804   |  
|                        | Life Operations                      |          |            | 936   |          |            |       | 561      |          |         |            | 1,122       |             |              |           | 189   |           |         |       | 86  |  |   |       | 337   |  
|                        | Corporate and Other and Eliminations |          |            | 1,416 |          |            |       | 245      |          |         |            | 1,600       |             |              |           | 9     |           |         |       | 505 |  |   |       | 440   |  
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        
|Consolidated Operations |                                      | $        | 13,282     |       |          | $          | 2,194 |          |          | $       | 11,890     |             |             | $            | 2,143     |       |           | $       | 2,074 |     |  | $ | 8,941 |      
|                        |                                      |          |            |       |          |            |       |          |          |         |            |             |             |              |           |       |           |        

*Net written premiums relate to
business in property-casulty companies only.

**Investment income is allocated based
on each segment's net carried insurance reserves as adjusted.

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SCHEDULE IV. REINSURANCE

Incorporated herein by reference from page 92 of the 2001 Annual
Report to Shareholders.

SCHEDULE V. VALUATION AND QUALIFYING ACCOUNTS

|                                                   |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |            |  |  |   |     | 
|-------------------------------------------------- | -------------------------------- | ------------------------------------- |  | ---------- | -------- |  | ---------- | -------- | -- | ---------- | ---------- | - | - | ------------- |  | - | ---------- |  |  | - | --- | 
|                                                   |                                  |                                       |  | Balance at |          |  | Charged to |          |    | Charged to |            |   |   |               |  |   |            |  | 
|                                                   |                                  |                                       |  | Beginning  |          |  | Costs and  |          |    | Other      |            |   |   |               |  |   | Balance at | 
|(In millions)                                      |                                  | of Period                             |  |            | Expenses |  |            | Accounts |    |            | Deductions |   |   | End of Period | 
|                                                   |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |           
|Year ended December 31, 2001
Deducted from assets: |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |            |  |  |  
|                                                   | Allowance for doubtful accounts: |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |            |  |  |   |    
|                                                   |                                  | Insurance and reinsurance
receivables |  | $          | 321      |  |            | $        | 57 |            |            | $ |  |               |  | $ | 27         |  |  | $ | 351 | 
|                                                   |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               | 
|Year
ended December 31, 2000
Deducted from assets: |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |            |  |  |  
|                                                   | Allowance for doubtful accounts: |                                       |  |            |          |  |            |          |    |            |            |   |   |               |  |   |            |  |  |   |    
|                                                   |                                  | Insurance and reinsurance
receivables |  | $          | 310      |  |            | $        | 16 |            |            | $ |  |               |  | $ | 5          |  |  | $ | 321 | 
|                                                   |                                  |                                       |  |            |          |  |            |          |    |            |            |   |   |               | 

SCHEDULE VI. SUPPLEMENTAL INFORMATION CONCERNING
PROPERTY-CASUALTY INSURANCE OPERATIONS

|                                                                                                                             |  |                                           |        |  |      |   |        |      |  |   |       | 
|---------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ----- | 
|                                                                                                                             |  | Consolidated Property-Casualty Operations |       
|                                                                                                                             |  |                                           |       
|As of and for the years ended December 31,                                                                                   |  | 2001                                      |        |  | 2000 |   |        | 1999 | 
|(In millions)                                                                                                                |  |                                           |        |  |      |   |        |      | 
|Deferred acquisition costs                                                                                                   |  | $                                         | 1,103  |  |      | $ | 1,121  |      |  |   |       | 
|Reserves for unpaid claim and claim adjustment expenses                                                                      |  |                                           | 29,551 |  |      |   | 26,408 |      |  |   |       | 
|Discount deducted from claim and claim adjustment expense reserves
above (based on interest rates ranging from 3.5% to 7.5%) |  |                                           | 2,456  |  |      |   | 2,413  |      |  |   |       | 
|Unearned premiums                                                                                                            |  |                                           | 4,505  |  |      |   | 4,821  |      |  |   |       | 
|Net written premiums                                                                                                         |  |                                           | 8,014  |  |      |   | 8,640  |      |  | $ | 8,941 | 
|Net earned premiums                                                                                                          |  |                                           | 7,598  |  |      |   | 8,847  |      |  |   | 9,964 | 
|Net investment income                                                                                                        |  |                                           | 1,260  |  |      |   | 1,740  |      |  |   | 1,725 | 
|Incurred claim and claim adjustment expenses related to current year                                                         |  |                                           | 7,192  |  |      |   | 6,331  |      |  |   | 7,287 | 
|Incurred claim and claim adjustment expenses related to prior years                                                          |  |                                           | 2,466  |  |      |   | 427    |      |  |   | 1,027 | 
|Amortization of deferred acquisition costs                                                                                   |  |                                           | 1,748  |  |      |   | 1,729  |      |  |   | 2,005 | 
|Paid claim and claim adjustment expenses                                                                                     |  |                                           | 9,797  |  |      |   | 8,434  |      |  |   | 9,964 | 

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INDEPENDENT AUDITORS REPORT

The Board of Directors and Stockholders of
CNA Financial Corporation

We have audited the consolidated financial statements of CNA Financial
Corporation (an affiliate of Loews Corporation) and subsidiaries as
of December 31, 2001 and 2000, and for each of the three years in
the period ended December 31, 2001, and have issued our report thereon dated
February 13, 2002, which report includes an explanatory paragraph as to a
certain accounting change; such consolidated financial statements and report
are included in the Companys 2001 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the financial
statement schedules of CNA Financial Corporation and subsidiaries listed in
Item 14. These financial statement schedules are the responsibility of the
Companys management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

Deloitte & Touche LLP
Chicago, Illinois
February 13, 2002

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##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | CNA Financial Corporation                                                                           
|
| | By  /s/ Laurence A. Tisch                                                                           
| |                                                                                                     
| | Laurence A. Tisch
Chief Executive Officer
(Principal Executive Officer)                             
|
| | By  /s/
Robert V. Deutsch                                                                           
| |                                                                                                     
| | Robert V. Deutsch
Executive Vice President and
Chief Financial Officer (PrincipalAccounting Officer)

Date: March 8, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.



|                           |  |          |  |       |  |               |  | 
|-------------------------- |  | -------- |  | ----- |  | ------------- |  | 
|Signature                  |  | Title    |  |       |  |              
|                          
|                          
|/s/ Antoinette Cook Bush   |  | Director |  |       |  |              
|                           |  |          |  |       |  |               |  | 
|Antoinette Cook Bush       |  |          |  |       |  |               |  | 
|                          
|/s/ Ronald L. Gallatin     |  | Director |  |       |  |              
|                           |  |          |  |       | 
|Ronald L. Gallatin         |  |          |  |       |  |               |  | 
|                          
|/s/ Walter L. Harris       |  | Director |  | Dated
|                           |  |          |  |       | 
|Walter L. Harris           |  |          |  |       |  | March 8, 2002
|                          
|/s/ Bernard L. Hengesbaugh |  | Director |  |       |  |              
|                           |  |          |  |       | 
|Bernard L. Hengesbaugh     |  |          |  |       |  |               |  | 

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|                          |  |                         |  |       |  |               |  | 
|------------------------- |  | ----------------------- |  | ----- |  | ------------- |  | 
|Signature                 |  | Title                   |  |       |  |               | 
|                         
|/s/ Stephen W. Lilienthal |  | Director                |  |       |  |              
|                          |  |                         |  |       |  |              
|Stephen W. Lilienthal     |  |                         |  |       |  |               |  | 
|                         
|/s/ Edward J. Noha        |  | Chairman of the Board   |  |       |  |              
|                          |  | and Director            |  |       |  |              
|Edward J. Noha            |  |                         |  |       |  |               |  | 
|                         
|/s/ Joseph Rosenberg      |  | Director                |  |       |  |              
|                          |  |                         |  |       | 
|Joseph Rosenberg          |  |                         |  |       |  |               |  | 
|                         
|/s/ James S. Tisch        |  | Director                |  |       |  |              
|                          | 
|James S. Tisch            |  |                         |  |       |  |               |  | 
|                         
|/s/ Laurence A. Tisch     |  | Chief Executive Officer |  |       |  |              
|                          |  | and Director            |  |       |  |              
|Laurence A. Tisch         |  |                         |  |       |  |               |  | 
|                         
|/s/ Preston R. Tisch      |  | Director                |  | Dated
|                          |  |                        
|Preston R. Tisch          |  |                         |  |       |  | March 8, 2002
|                         
|/s/ Marvin Zonis          |  | Director                |  |       |  |              
|                          | 
|Marvin Zonis              |  |                         |  |       |  |               |  | 

29